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As a private landlord in a down economy where many renter's scores are less than ideal, I was wondering if I can help by reporting to the credit agencies on time payments for my renters. Does anyone know the process to do this, or if it's even possible?
Of course, if I have tenants that do not pay on time, I would also report that as well.
I believe having this ability will allow me to find more reputable/responsible tenants during my screening process. All my tenants I currently have have scores less than 575 due to foreclosures, but they have been very responsible and I'd hate to see that something like renting (which may be a large chunk of their income) does not really get noticed on their credit.
I doubt that any credit agencies have the resources to add this kind of level to their statistical databases, nor would they be interested in doing so. Your good tenants can always be assured that, when they move on, you'll vouch for them wholeheartedly.
Tenants usually pay a month in advance, so you are not extending credit to them. What exactly would you report to the credit reporting agencies? Mind you, inaccurate credit reporting is against the law (FCRA).
Tenants usually pay a month in advance, so you are not extending credit to them. What exactly would you report to the credit reporting agencies?
I'm going to have to disagree with you on your thought.
When my tenants sign a lease with me, the lease clearly states that the tenant agrees to pay me X amount of money for the 6month/1year lease. That total X is then divided equally into convenient monthly payments which in my opinion is extending credit to the tenant. After their lease is up, they must sign another lease (HOA rules prohibit leases less than 6 months .. so month to month is not an option). Nothing is preventing my tenants from paying off the entire lease amount in full at any time.
It's just like agreeing on purchasing a home or a car where the final purchase price is known, but you are paying monthly installments. Similarly, if you choose to finance your furniture, big screen tv or medical services .. all are reported to the credit angencies.
After looking at my cell phone bill, I realized that I'm paying for service in advance yet they report to the credit companies. Same with my internet and cable provider.
After looking at my cell phone bill, I realized that I'm paying for service in advance yet they report to the credit companies. Same with my internet and cable provider.
Most contracted financial transactions are paid for in advance, if not directly then with a deposit paid in advance to cover the person extending it in case of default. The whole concept of positively reporting to a credit agency people who pay their rent or any other bills on time is so out there that I think you're pulling legs on this one!
Found this in the Landlord Protection Agency newsletter for 7/12:
Quote:
Experian provides renters with an opportunity to build credit history through new collaboration with ClearNow®. Renters of any size or type of residential property can now work with their landlords and ClearNow to report their rental payments to Experian RentBureau.
Experian, the leading global information services company, announced that it has extended its capability to accept rental payment data from individual landlords and property managers through its new collaboration with ClearNow®. ClearNow offers a low-cost and easy solution for collecting and making payments electronically and automatically. Experian, through its RentBureau business, currently receives rental payment data from more than 3,000 apartment communities, most of which are managed by large property management companies. Whether a renter lives in a large apartment complex or rents from a landlord that only manages one property, Experian now will provide an opportunity for all renters to build credit history through rental payments.
It should all be so logical; so easy. Renters sign a contract and both parties honor the contract. HA! What do you do when your renters have absolutely no regard for the law? No respect for contracts? Rules don't matter to them. And their word means nothing. What recourse does a fledgling landlord have?
After moving out of state, we hired a professional property management company to handle our property- one that screens renters and takes care of collecting rent, maintaining property etc. Our first batch of renters were Kim and Kimberly Mod Cut Name. They signed a year lease (December 2011), initially paying one month plus a damage deposit. Long story short - they brought in 19 people, over 25 horses, two llamas, a donkey, unknown dogs and cats - and refused to pay the rent. When we asked them to leave, they wouldn't budge but remained until mid-May. In January 2012, Kimberly's mother died in our house. Although her death had nothing to do with us or our property, they used that event as one of their excuses for not paying their rent. They trashed our property and left tons of garbage and junk. It cost us thousands of dollars in repairs and clean-up. Of course they PROMISED to pay the money they owed, but Kim and Kimberly proceeded to disappear, ignoring our attempts to contact them through email.
But wait! There's more! We then hired a local caretaker who recommended that we rent to Chris and Krystyna . They have two little boys. Nice young family right? Well, they did the exact same thing. They signed the lease, moved in, refused to pay rent, refused to leave, trashed the place, and left tons of garbage and junk - just like the first family had. A double-whammy. Two bad renters in a row.
If a stranger trespassed and vandalized your property, it would be a criminal matter. If they took money out of your purse, you could prosecute them for robbery. But it seems that bad renters are allowed to get away with whatever they want. It's just wrong! I would love to report these renters - if only to protect their next victims. In hindsight, I don't know what we did wrong - except to rent to these scam artists. But there weren't any warning signs to begin with. They seemed fine. But the lies, the excuses, the dishonesty that followed.... It's unbelievable that people can be like them. Court is certainly an option, but being out of state makes that hard, if not impossible. None of these bad renters are impressed with threats of court. And both sets of bad renters have now gone underground. Kim, Kimberly, Chris, and Krystyna have devastated not only my property but also my faith in humanity.
Mod Cut Link.
Last edited by Ultrarunner; 10-03-2012 at 02:17 PM..
Reason: Not OK to post full names or links
Evictions and judgements end up on credit reports, so if you did an eviction, it'll be on the record, and in my area an eviction is a scarlet letter that will haunt a tenant for years.
Going to court for a judgement is the responsible thing to do as a landlord, and though it may be a hassle- if that tenant manages to turn their life around and wants to buy a house or even a car, they'll likely be told they can't until they pay you.
If you're renting to people with unstable work history & no assets, that's your mistake.
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